Tuesday, February 22, 2011

In this posting, I'll take a brief look at Libya's contribution to the world's oil picture.

Libya is one 12 current members of OPEC, joining the Organization in 1962, two years after OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Libya played a pivotal role in the world's 1973 oil crisis and, for nearly 3 decades, played the role of a rather belligerent producer. According to OPEC, revenues from Libya's oil sector contribute about 95 percent of its export earnings and about 25 percent of its gross domestic product. As well, because Libya has a relatively small population of 6.4 million people and a relatively high GDP of $67.2 billion, it has one of the highest per capita GDPs in Africa at $10,479 although the wealth is distributed far from evenly with approximately one-third of Libyans living below the national poverty line.

Here are two pie charts showing OPEC's share of the world's crude oil reserves in 2009 and a country-by-country breakdown of oil reserves in each of the 12 OPEC nations:

Within the OPEC family, Libya has the seventh highest reserves at 4.4 percent of the total; well below Saudi Arabia at 264.6 billion barrels and Venezuela at 211.2 billion barrels.

According to the Energy Information Administration (EIA), Libya has total proven reserves of 44 billion barrels of oil as of January 2010, the largest proven oil reserves in Africa. Here is a graph comparing proven oil reserves for major oil producing nations in Africa:

Notice how, other than Nigeria, Libya's oil reserves total more than the other four major African oil producing nations.

Here is a map showing the location of Libya's oil fields and the country's major pipeline infrastructure:

Exploration for oil began in 1956 when the first exploration concessions were granted to foreign-owned corporations. Oil was discovered in Libya in 1959 and oil exports began in 1961. Rapid development of the country's oil fields resulted in oil production exceeding 3 million barrels of oil per day (BOPD) by 1969. Fortunately for Libya, their crude is relatively light and sweet with gravities ranging from 26 to 43 degrees API. In 1970, the Libyan government nationalized the country's oil industry and by 1972, production had dropped to 2 million BOPD. By 1973, Libya's support for the oil embargo to the United States resulted in further production drop to 1.5 million BOPD and to just over 1 million BOPD by 1987, the year that Pan Am Flight 103 exploded over Lockerbie. Despite sanctions imposed by the United Nations in 1992, oil production rose to 1.4 million BOPD where it remained until the turn of the millenium. Sanctions were lifted in 2004 and cooperation with international oil companies led to an increase in production to nearly 1.9 million BOPD. Here is a graph showing Libya's oil production over the entire history of its oil industry as well as its production forecast to the year 2030;

Libya's oil production is forecast to rise to roughly 2.2 million BOPD over the next decade and then gently decline to just around 1.6 million BOPD in 2030 by which time the country will have produced 35 billion barrels:

Here is a graph showing Iraq's oil production and consumption for the last 10 years from the EIA. Notice how small Libya's domestic consumption rate is when compared to its overall production:

In the most recent year for which data is available from OPEC, Libya produced at average of 1.474 million BOPD (its quota) but according to the EIA, the country produced 1.65 million BOPD, 150,000 BOPD below its capacity but well above its official quota.

Here is a graph showing cumulative oil production and cumulative oil discoveries. Note how discoveries rapidly rose during the 1960s and rapidly levelled off from 1990 onward:

By 2003, oil discoveries totalled 52 billion barrels of which 23 billion had already been produced. At the discovery rate of 100 million barrels per year (average for the immediate previous years), Colin Campbell at the Association for the Study of Peak Oil (ASPO) estimated that Libya's ultimate reserves will reach 55 billion barrels of oil. By 2007, over 27 billion barrels of oil had been produced meaning that the country was at or near its reserve midpoint (think peak oil).

Like other Middle East nations, Libya is experiencing rapid population growth. Libya's birth rate reached 7.59 births per woman in 1971 and dropped slowly to 2.69 births per woman in 2008. In 1950, Libya was home to 1 million residents; by the turn of the millenium, that number had reached over 5 million and is projected to reach 8 million people by 2025. As the population has risen, so has the country's domestic oil consumption. On top of the rise in population, per capita consumption has risen by around 2.5 percent per year since 2003 from 14.3 barrels of oil per person per year in 2000 to 17.3 barrels of oil per person per year by 2007. As shown in this chart, per capita oil consumption is projected to rise to around 26 barrels of oil per capita by 2030, equal to today's per capita consumption level in the United States:

While the per capita rise may seem high, in 2009, Libya was only consuming 280,000 barrels of oil per day and this is projected to rise to just less than 600,000 barrels of oil per day by 2030.

According to the EIA, Libya's net exports for 2009 were roughly 1.5 million BOPD with the vast majority of oil being exported to Italy (425,000 BOPD), Germany (178,000 BOPD) and France (133,000 BOPD). Here is a pie chart showing the beneficiaries of Libya's oil exports:

According to the EIA, Italy imported 1.36 million BOPD total in 2009 and Libya contributed the most of any nation by a wide margin supplying Italy with 31 percent of its needs. In the case of Germany, Libya supplies 8 percent of its net oil imports and in the case of France, Libya supplies 7.6 percent of its net oil imports. Libya exported an estimated 80,000 BOPD to the United States in 2009, well off highs of 117,000 BOPD in 2007 because of the economic slowdown and drop in demand.

While Libya is not a huge player in the world's oil industry compared to giants like Venezuela and Saudi Arabia, the oil they produce is an important component of Italy's imports in particular and, while the country contributes only 2 percent of the world's daily oil production, as the point of peak oil is reached and passed, continued production of oil from Libya will remain key to maintaining balance between supply and demand. That said, in the grand scheme of things, freedom of repressed people around the world is far more important than how much it costs us to fill our vehicles with gasoline.

Look at the weight of Libyan oil within Ireland's sourcing. That method is the better statistical measure of geo political consequence when supply disruption is contemplated. Overall Libya is not a big deal unless the Saudis are lying about being able to pump more and the Iranians choose not to step up. The Iranians however are backing the Libyan opposition to the hilt.

Agree to finding excuses built up for oil rich countries and how that can be manipulated by striking with one pretext or the other. What went behind the scenes to build up such a situation could be a hot source for some Hollywood movie(s). Is this a right way to spend tax-payers dollars?

How 112 Tomahawk cruise missiles with nuclear war head be not affecting civilians,when the declared mission is to save civilians?

Another issue is here that during every Presidency, some war scenario crop up to divert public attention from real issues facing the country, enormous debt in trillions for one, unemployment the other and so on.

Is this some fight for protecting civilians or simply and excuse to ensure wins in elections.Simply my opinion.I have always been an optimist looking for good sense to prevail, but somehow find that it does not.My heart goes out to for civilians, whatever side they may be.

wow so suprised how uninformed some people can be.Those tomahowks were not nuclear loaded and for once arab countries need to man up n be responsible for their actions. we are tired of this stupid 'oil card' these mofos play all the time.Tunisia, egypt, yemen all had revolts and in none of these countries did we see foreign military intervation.arent these oil rich countries?We should all be clear about this situation. First USA was very reluctant to offer its military support. This military intervention is a coalition force with diverse countries ranging from super powers to small countries and an arab nation. Beside US,Uk, France, countries like Qatar, Denmark and Canada have all supplied fighter jets to this mission so why is the US held responsible for this mission despite its reluctance to take part and its minimal participation.Secound, lets be critical of the libayn government. A leader is in power for 42 years, people say they are tired of him and his reaction is military. He is using superior weapons and military experince on a group of civilians.He declares on national tv that he is attacking an area of 700,000 people and he will show no mercy.The UN authorises a no-fly zone to protect these civilian and the dictator abuses it by using fighter jets to kill civilians. Concerned countries go in to protect these civilians the dictator plays the oil card once again. western countries like libyan oil my foot. Qaddafi should check his administration first before using funny excuses like oil, islam and imperialism.

Libya solutions (continued - Resolution 1973 of the Security Council of the United Nations). Diary on 23/03/2001: I worked with the "Development Programme UNDP United Nations. (will send to you - see). http://laodongme.blogspot.com/

These charts do not include Ghana's developing offshore oil fields nor new fields on the border of Chad and the Central African Republic, despite recent Chinese investment to the tune of close to $20 billion in helping to develop these resources.

Gaddafi had recently (before this current war) announced his intention to nationalize Libya's oil fields again, and my guess is that what we are seeing in Libya now is a foreign military effort to oust Gaddafi over his intent to nationalize his own oil fields.

Hamza, you are sadly incorrect. Egypt has been the 3rd largest recipient of U.S. aid--billions every year. Israel the 1st largest. Both are essential staging grounds for the U.S. & NATO military to dominate their oil rich neighbor countries. The U.S. can't just fly in, bomb away and fly back. The U.S. needs a place for its military bases in order to dominate the world's oil. Egypt allows Israel to be America's proxy. Without Egypt, then Israel can't be propped up all by itself. Without Israel, a complete American proxy, doing America's dirtiest work for 40 years, "we" control the Middle East and its oil. It isn't oil per se, it is the control of the oil--and that requires control of the shipping lanes and neighboring countries in order to steal it off to Europe/America.

Qadaffi refused to sell cheap to the U.S. and retain national ownership over its oil. Libyans will NOT give up their national resources and return to colonization their were in 40 years ago. Why give up their free schooling through college, free healthcare & housing, and guaranteed jobs?

If the richest 1% of Americans didn't control 40% of America's resources, then we could have the same benefits. Why do the largest American companies pay no taxes and direct our army to do their bidding?

cybergrace, what is your agenda? Are you just a yuppie dilettante or do you have constructive ideas? You make it sound as if Kaddafi's Libya was utopian, but have you heard the horror stories from Kaddafi's prisons? Or, perhaps you just ignore them because they are not in accord with your opinions.

Hamza, in his March 22nd post, was (contrary to your post of May 12) correct in every way. I know that you will cling to your conspiracy theories regardless of what people say to you. But, consider this: has the US, unilaterally, interfered with the domestic politics in Kuwait (major oil producer), or Venezuela (major oil producer), or Saudi Arabia (premier oil producer), or Iran (major oil producer) since the debacle in Iran during the Carter Administration? The answer is no. Virtually the entire Middle East was allied with the US against Iraq in 1991, and for two reasons; Saddam's threat to control oil, and Saddam's aggression.

Even the flawed 2004 Iraq War was not a unilateral action. In the wake of 911, the spectre of terrorism led directly to the Afghan and Iraq actions. They had nothing to do with oil; the terrorists had declared war, a war based entirely on religious extremism.

The fact is that the world will not allow any single nation disproportionate control of oil. But, I know you will cling to your conspiracy theories. So, I might as well climb down off my soap box and go home. Have a nice day!

cybergrace tells the truth. hamza and anonymous, why do you not do some research? Hamza told so many lies I don't know where to begin and thank you, cybergrace, for rebuting him.hamza, do you realise that in 2010 Libya was not at war, had the world's highest home ownership 92% in the world and the lowest divorce rate. Given that most humans all over the world want peace, a secure home, and a happy family, I'd say that Gaddafi does a great job for his country.Time to open your eyes and see past the lies the western media and education system tell you.

Why don't you understand that the war for occupation of Libya is not about oil,you'll see for about 30-40 years from now,that all of this is happening only for ONE reason and thats WATER pure drinking water,there is a myth or gossip who says that Libya owns enormous amounts of clean drinking water,so enormous that only Libya can supply whole World with clean drinking water for about 20-25 years.P.S We will find other fuel alternatives,but we will never find other alternatives for water

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About Me

I have been an avid follower of the world's political and economic scene since the great gold rush of 1979 - 1980 when it seemed that the world's economic system was on the verge of collapse. I am most concerned about the mounting level of government debt and the lack of political will to solve the problem. Actions need to be taken sooner rather than later when demographic issues will make solutions far more difficult. As a geoscientist, I am also concerned about the world's energy future; as we reach peak cheap oil, we need to find viable long-term solutions to what will ultimately become a supply-demand imbalance.